Pfizer Inc., a leading pharmaceutical in the world, has posted significant growth in top line during the year ended December 2010 on account of acquisition of Wyeth during October 2010. Its revenues increased by 36 per cent to US$ 67.8 billion from $50 billion in the previous year. Its net profit declined by 4 per cent to $8,257 million from $8,635 million in the previous year.

The company has decided to implement cost cutting measures to maintained its targets for the year 2012. It is cutting down R&D expenditure to $6.5 to $7 billion in 2012 as compared with its previous target of $8 to $8.5 billion. Its R&D expenditure reached at $9.4 billion in 2010 as against $7.8 billion in 2009. It is planning to stop funding research in the areas of urology, respiratory, internal medicine, allergy and tissue repair and focusing more on areas of cancer, neuroscience, inflammation, vaccines and immunology. It is planning to close its Sandwich, England research center and shift some part to its facilities in Cambridge, Massachusetts from Groton, Connecticut.

The company also announced buy-back of shares worth $5 billion in next year. Ian Read, president and CEO, stated “We believe that the planned increase in share repurchases and the decrease in research and development spending will serve to provide a greater degree of certainty and a more clearly defined path for us to achieve our 2012 adjusted diluted EPS target of between $2.25 and $2.35.”

Revenues for full-year 2010 compared with full-year 2009 were favorably impacted by $18.1 billion, or 37 per cent, due to legacy Wyeth products. US revenues were $29.0 billion, an increase of 34 per cent  compared with full-year 2009. Its  international revenues were $38.8 billion, an increase of 37 per cent, which reflected 33 per cent operational growth and a 4 per cent favorable impact of foreign exchange. US revenues represented 43 per cent and international revenues represented 57 per cent of total revenues for full-year 2010.

Pfizer operates two distinct commercial organizations: biopharmaceutical and diversified. Biopharmaceutical includes the primary care, specialty care, established products, emerging markets and oncology customer-focused units, while diversified includes animal health, consumer healthcare, nutrition and Capsugel.

Its biopharmaceutical sales increased by 29 per cent to $58.5 billion from $45.4 billion in the previous year. The sales of primary care moved up by only 3 per cent to $23.3 billion from $22.6 billion and that of specialty care up by 103 per cent to $15.0 billion from $7.4 billion. Established products registered a growth of 30 per cent to $10.1 billion as against $7.79 billion. Emerging markets contributed sales of $8.7 billion as compared to $6.2 billion in the last year.

Worldwide sales of Lipitor declined by 6 per cent to $10.7 billion from $11.4 billion. Lipitor sales in US declined by 6 per cent to $5.3 billion from $5.7 billion. Sales of Enbrel moved up to $3.3 billion from $378 million. Its sales of Lyrca improved by 8 per cent to $3.1 billion from $2.8 billion despite decline in US by 5 per cent to $1.4 billion. Celebrex sales also declined by 2 per cent to $2.4 billion.

Ian Read, said, “I am pleased with our solid financial performance again this year despite continued challenging market conditions. Pfizer has a strong asset base across various therapeutic areas and geographies in addition to a promising late-stage product pipeline, which I believe positions us well going forward.”

“We continue to closely evaluate our global research and development function and will accelerate our current strategies to improve innovation and overall productivity. Key steps in this process include greater focus in disease areas of greatest scientific, medical and commercial opportunity, a realigned global R&D footprint to increase our presence in key biomedical innovation hubs, and an increased level of outsourcing for services that do not drive competitive advantage for Pfizer. Furthermore, we plan to enhance internal programs that are designed to strengthen pipeline delivery and differentiated innovation. As a result of these actions, we expect to reduce adjusted R&D expenses to between approximately $6.5 to $7.0 billion in 2012 compared with our previous target of $8.0 to $8.5 billion.”

Read concluded, “In addition, during 2011 we expect to complete our ongoing review of the composition of our business portfolio to determine the optimal mix of businesses that we can appropriately fund and manage in order to achieve consistent growth and maximum return on investment. We believe these decisions, taken together, will continue to improve our business profile and provide both near-term and longer-term financial benefit.”

The company also remains on-track to achieve its cost-reduction target associated with the Wyeth acquisition of approximately $4 to $5 billion, by the end of 2012, at 2008 average foreign exchange rates, in comparison with the 2008 pro-form a adjusted total costs of the legacy Pfizer and legacy Wyeth operations. This cost-reduction target does not include the impact of the planned reduction in R&D spending announced today. In 2010, the company met its target of achieving more than $2 billion of these cost reductions.